The private property market in Singapore recorded a significant decline

The month of September didn’t look so good for developers activating in the private property market, as the number of units they managed to sell was significantly lower than the one recorded in the previous months. Thus, if they succeeded in selling 1,724 units in July, recording a drop of 64.3%, and 1,246 units in August, with a drop of 50.6%, in comparison with September when they managed to sell just 616 units so far. According to specialists, this decrease was generated by two factors. First there were the cooling measures of July, meant to slow down the increasing demand coming from homebuyers. Secondly, August brought in the Hungry Ghost Festival, a period in which very many people stay away from making investments in new properties.

The Urban Redevelopment Authority was the one that released the previously mentioned numbers, after getting the feedback from several developers that have licenses for activating in the private homes sector. Still, it is worth mentioning that the URA survey excluded the hybrid housing options, like the executive condominium, which is a merge of private and public housing. The decreasing numbers in the private homes sector is also due to the fact that developers decided to halt their new launches both during the Hungry Ghost Festival and in the period after the cooling measures were announced and made active. They knew that sales won’t be that great during these periods, as people were reserved in making purchases in the real estate domain considering the previously mentioned factors. Thus, the number of units launched in September is 76.2% lower than in July and 32.7% lower than in August. If the month of July brought 2,239 new units to the market and in August 794 new units were launched, in September the number decreased to 534 units.

But, the sales in the private sector aren’t lower just in September. All the sales of the first 8 months of 2018 summed up are lower than those recorded in the same period of 2017. Thus, if last year 8,397 units got sold in the first 8 months, 6,287 units were sold in 2018, which means that there’s a decrease of 25%. But, as the head of research and consultancy for OrangeTee & Tie, Ms. Christine Sun, said, these decreases didn’t come unexpected. With each measure released and each intervention made, the real estate market will react back. Besides this, she added that foreign homebuyers are drove even further away from the property market of Singapore, due to the increased Additional Buyers’ Stamp Duty, which can go up to 20%, and the changed financing rules, which got stricter than before. Since July 2015, when foreign property owners got 4.2% of the private property market in Singapore, only the last month of 2018 was close to these numbers. Thus, in the same month of 2018, foreigners made only 5.1% of the market. Let us not forget that the highest percentage was reached last year, when foreigners got 7.4% of the market, so the drop is indeed noticeable.